In 1991, the House Fiscal Agency reported that health insurance costs for public school
employees rose 801 percent over the previous decade.36 By comparison,
expenditures for state employees health insurance rose 269 percent over the same
period. The rising cost of health insurance in general can be attributed to any number of
factors: inadequate reimbursements for Medicare and Medicaid, expanded ranges of covered
losses, the price of new medical technology, the costs of malpractice insurance, and so
on. But why are health insurance costs for public school employees rising at such a rapid
rate? The two most obvious reasons relate to the MEA: unionization and MESSA. Since unions
such as the MEA historically obtain more insurance benefits from their employers than
non-union employees, typical insurance costs among unionized employees are 24 percent
higher than average.37 With MESSA, the preexisting high costs are amplified,
because the greater than average insurance benefits are purchased from an MEA subsidiary
which has secured market predominance through the union's bargaining leverage. There is
diminished incentive for MESSA - the largest administrator of insurance benefits to school
districts - to economize and minimize the costs of its benefit packages, since a school
district's choice of insurance administrator is not based solely upon cost effectiveness.
With the MEA demanding greater than average insurance benefits from school districts, and
with no need for MESSA to minimize costs in a competitive manner, school districts
inevitably will incur higher overall costs for employee insurance.